ICBA to CFPB: Small-biz review needed ahead of overdraft proposal

ICBA and other groups called on the Consumer Financial Protection Bureau to hold off on any rulemakings related to overdraft and non-sufficient-funds fees until it conducts a statutorily required review under the Small Business Regulatory Enforcement Fairness Act.

Details: In a joint letter to the CFPB, the groups said any rulemakings on overdraft and NSF fees would have a significant economic impact on financial institutions with assets of $850 million or less, the threshold that triggers the SBREFA review process. While the CFPB’s latest rulemaking agenda anticipates an overdraft proposal in the coming days, they said, the agency has not initiated a SBREFA review.

Background: The SBREFA process, as amended by Section 1100G of the Dodd-Frank Act, requires the CFPB and other agency offices to convene a group of small-business entities that may be affected by the proposal and solicit their feedback before issuing a proposed rule.

Pending Rulemaking: The CFPB last month issued a report on consumer experiences with overdraft and NSF fees that found many consumers who were charged overdraft fees had access to a cheaper alternative. CFPB Director Rohit Chopra previously told Congress the bureau’s pending overdraft proposal will focus on addressing illegal overdraft abuses, not eliminating overdraft programs.

ICBA View: ICBA has repeatedly pushed back against the Biden administration’s campaign against “junk fees,” noting the narrative mischaracterizes practices such as overdraft services and credit card late fees.

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